The French law of 4 August 2008, known as the Law on the Modernisation of the Economy (“LME”), has established, amongst other things, a Competition Authority in place of the former Conseil de la Concurrence (Competition Council). The power to review concentrations that meet the notification requirements under Articles L. 430-1 et seq of the Commercial Code, that used to be in the hands of the French Ministry of Finance, is one of the powers conferred, from now on, upon the Authority.

Until the entry into force of the decree implementing the relevant provisions of the LME earlier this year, the Council intervened in merger control procedure only if the Ministry decided to open a detailed investigation (called "Phase 2") in order to issue an opinion on the possible effects of the notified transaction on free competition.

In the new system set out in the LME, the Authority stands as the only competent body for the examination of a notifiable transaction. The Minister of Economy and Finance will be intervening only occasionally in cases where it decides general public interest is at stake.

This paper aims to highlight two significant elements of the merger control reform: first, the introduction of new notification thresholds for certain specific transactions (1), and second, the modification of the merger control procedural timeline (2).


In addition to the generally applicable notification thresholds concerning mergers which remain unchanged (i.e. a concentration must be notified if the combined worldwide turnover of the parties to the concentration in the preceding financial year exceed 150m euros and at least two of the parties have achieved a turnover in France in excess of 50m euros during the same period) , the LME introduces specific notification thresholds for two types of operations: operations in the retail sector and operations in which at least one party exercises its activity in overseas territories.

A concentration can now be notified even if the turnover generated in France by the acquiring party and / or the target is below 50 million euros.

1.1 Applicable thresholds in the retail sector (Article L430-2 II

When two or more parties of a merger operation run one or more shops in the retail sector, the operation shall be notified to the Authority under the following conditions:

– The total worldwide turnover excluding tax of all undertakings or groups of individuals or legal entities that participate in the concentration exceeds 75 million euros;

– The total turnover excluding tax generated in France in the retail sector by at least two of the concerned companies or groups of individuals or legal entities is more than 15 million euros, and
The transaction does not fall within the scope of Regulation (EC) No. 139/2004 of January 20, 2004 – applicable to operations which posses a "Community dimension".

Since then, the Authority issued draft merger control guidelines in which it clarifies the concept of "retail shop" for the purpose of the merger control regulation. Although these guidelines are still subject to finalisation (the Authority is currently running a public consultation and should hopefully adopt its guidelines before the end of the year), it seems that, by retail shop, one should understand a shop supplying goods to consumers. There is, however, still a debate as to whether certain provisions of services should not be assimilated to supply of goods for the purpose of the merger control regulation.

1.2 Thresholds for operations in the overseas territories (Article L430-2 III

When at least one of the parties of the concentration carries out all or part of its activity in one or more overseas territories, the operation shall be notified to the Authority under the following conditions:

– The total worldwide turnover excluding tax of all undertakings or groups of natural or legal persons participating in the concentration exceeds 75 million euros;

– The total turnover excluding tax generated individually in at least one overseas territory by at least two companies or groups of natural or legal persons participating in the concentration exceeds 15 million euros.

– The operation does not have a Community dimension.

As part of the ongoing discussion on the draft merger control guidelines issued by the Authority, some stakeholders have called for the Authority to clarify how it intends to apply the above criteria. Indeed, the particularity of overseas territories is that they usually each constitute a separate geographic market and an operator that enjoy a strong market position in one overseas territory will not necessarily enjoy any market power in another territory. As currently drafted, however, the notification thresholds may trigger an obligation to notify transactions involving buyer that could for instance be a strong market player in the French Caribbean territories, willing to purchase a target operating in another territory located, say, in the Indian Ocean, even if the buyer is not operating in the latter territory.

In addition, parties to a transaction subject to prior control by the Authority will have to take into consideration that the standstill obligation may last longer than in the past.


The applicable time limits under the control procedure has been considerably revised in order to take into account the residual powers of intervention available to the Minister of Economy and Finance, concerning both phases 1 and 2.

Under certain circumstances, he retains the power of self-tasking in order to "refer to" the case, and the power to ask the Authority to open the procedure of a detailed investigation.

2.1 Time limits applicable in Phase 1

The Authority shall take its decision within 25 days from the date of receipt of the complete notification (Article L430-5 I

When the parties offer commitments to the Authority within the time limit specified in (a) above, this time is automatically extended for 15 working days (Article L430-5 II

The assessment period may be suspended for up to 15 days at the request of the parties in case of a special requirement, such as the completion of commitments (Article L430-5 II

The Minister of Economy may decide to request the Authority to proceed to a detailed investigation within five working days after the decision of phase 1 (or from the moment he is informed that the Authority will not adopt a formal decision – tacit clearing of the merger) (Article L430-7-1 I

Thus, if the proposed transaction raises some competitive concerns and the parties accept to propose remedies, the Phase I review period my be extended up to 60 working days.

2.2 Time limits applicable in case of initiation of a detailed investigation of the notified operation (Phase 2).

The Authority shall conduct the detailed Phase 2 investigation of the operation within 65 working days(Article L430-7 I

In case the parties offer commitments to the Authority within less than 20 working days before the expiration of the first investigation time limit (65 working days), such limit will automatically be extended up to twenty working days after receipt of the commitments (Article L430-7 II

The investigation time limit may be suspended for up to 20 days at the request of the parties in cases of a special requirement, such as the finalisation of commitments (L430-7 III

The Authority itself may also suspend the time limit for up to 20 days when the notifying parties have failed to inform it of a new fact or to provide the information requested in due time. Similarly, the Authority may suspend the time limit when third parties have failed to provide the information requested, for reasons attributable to the parties of the concentration. The time limit resumes running from the moment the cause, which justified the suspension, no longer exists (Article L430-7 III

Finally, within 25 days after any phase 2 decision, the Minister may refer to a case of strategic importance. It may in this case override the decision of the Authority, in adopting a decision on the basis of reasons of general interest other than maintaining competition (industrial development, competitiveness of the undertakings concerned in the light of international competition, the creation or maintenance of employment) (L430-7-1 II).

According to the law, parties to a notifiable concentration will have to wait a minimum of 30 working days before they receive a definitive clearing decision in Phase 1. In practice, however, both the Authority and the Minister have already shown to be flexible and willing to take into consideration the parties’ time constraints, in particular when the concentration under review does not raise any particular concern from a competition law point of view.

If the proposed transaction raises competition concerns that cannot be solved during the Phase 1 examination period, the Authority will likely open a Phase 2 investigation (as it just did for the TF1/NT1-TMC merger). In such a case, the theoretical minimum timeline will be of 65 days, put could extend up to 130 days, if not longer in cases where the parties are found to obstruct the merger review process.

If you have any questions in relation to the above or any other French competition law matter, please do not hesitate to contact